With profits, losses, taxes, and more to contend with, being self-employed sometimes means being an entrepreneur and a financial expert all in one. This is where having an accountant can help.
If you’ve started a business or become self-employed, the chances are you’re something of an expert in your field. Just like how accountants are experts in theirs. So if you could use some additional support with your finances, keep reading to learn how an accountant could help – plus tips on hiring one.
How much does an accountant cost? Key takeaways
- average cost of accountant – fees for one-off tasks, like a Self Assessment tax return, can range between £150 to £300
- accountant responsibilities – beyond basic bookkeeping, accountants provide financial analysis, annual reporting, and sometimes strategic budgeting support
- why an accountant can be a good investment – an accountant can help mitigate the risk of tax penalties and late fines. They provide expertise on business structures (like sole trader vs. limited company) to optimise your tax efficiency
How much does an accountant cost?
How much you pay for an accountant will depend on the size of your business and the specific tasks you need help with. Accountant services for a larger company with a higher income will cost more than for a smaller business.
Hiring an account for a one-off job (such as help filing your Self Assessment) will likely cost between around £150 to £300.
You may also choose to keep an accountant on retainer for added certainty. This will usually be paid by a monthly fee, which will differ depending on the accountant you choose.
What does an accountant do?
An accountant is a qualified individual trained in bookkeeping and analysing finances. Part of their duties will usually include preparing annual financial reports, coordinating tax returns and aiding in future budgeting and financial planning.
How much, or little, your accountant does for you is often your decision. Some business owners will only speak with their accountant once a year during tax season, while others will engage regularly, using their accountant almost as a consultant.
However, even if you only ‘use’ your accountant once a year, they’ll be keeping an eye on your books the whole year round. And with a constant finger on your business’s financial pulse, they’ll be crucial in helping you with future planning.
Why hire an accountant?
Here are some reasons why you may want to use an accountant for your small business.
1. If you’re unsure about your taxes
For some, taxes can be a nightmare. Complicated forms, hefty late fines – in fact, knowing your IR35 from your R40 (and the hundreds of other codes) is near enough impossible, unless you’re an expert.
Hiring an accountant to deal with your taxes can be a simple way to avoid any late payment fines –while they could also save you money in terms of how much tax you actually need to pay.
2. If you’re struggling for time
Running a full-time business takes time. And lots of it.
Outside of your usual business hours you might be ordering stock, striking up new business or taking care of your website.
Sorting your taxes and organising your finances are just extra tasks on that never-ending to-do list. And if your time is stretched as it is, hiring an accountant to deal with this side of your business could be worthwhile.
3. If you want help with financial planning
Unlike bookkeepers who will generally take care of invoices and payroll, an accountant should help their client plan for the future by understanding their finances and the future landscape.
Sound financial planning and budgeting is crucial when it comes to the growth of your business. It can help with understanding things like when to hire an employee, how much work you can manage, and whether to adjust your rates.
Financial planning is especially important if you’re self-employed, as getting this wrong can impact your professional and personal life.
4. If you’re looking to be introduced to like-minded businesses
Aside from helping with your finances, accountants can be a fantastic source of networking opportunities.
Doing the job they do means they’ll speak to numerous business owners on a daily basis, from a variety of professions.
It could be anything from an experienced peer in the same line of work to a marketing consultant who could give your business a boost – accountants are a great way to make industry connections and grow your network.
5. If you’re worried about staying legal
Accountants can also help when it comes to keeping your business on the right side of the law.
The self-employed are regulated by a lot of different legislation, and understanding it all could be tricky. For example, some business owners fail to take out employers’ liability insurance for their employees, despite it being legally required.
They can also help when it comes to deciding which legal structure is right for your business. If you’re currently a sole trader, they may inform you that you’d be wise to switch to a limited company set-up. Aside from moving liability away from your personal finances, this can sometimes also help cut costs and increase your profitability.
Finding an accountant
If hiring an accountant sounds like a good idea for your business, you need to make sure you find one that’s the right fit for you. Fortunately, accounting is a job that can be done remotely, so you’re not limited by accountants in your local area.
You can also look for accountants who specialise in your industry or even a specific area of accounting, such as tax planning or identifying risks.
Your last step is to check testimonials from existing clients. Your finances are an important part of your business, so it’s crucial you find an accountant you trust. If you find your accountant through word of mouth, this is simple. Otherwise, you can check online reviews.
How much does an accountant cost? FAQs
How much does an accountant cost for a small business?
The cost of an accountant can vary depending on your business size and needs. For a single task, like filing a Self Assessment, expect to pay between £150 to £300. Alternatively, you can hire an accountant on a monthly basis for ongoing support, though these fees differ more significantly.
What exactly does an accountant do?
Beyond basic bookkeeping and tax returns, accountants analyse your finances to help with future budgeting and planning. They can prepare annual financial reports, make sure you’re compliant with regulations, and can even support you in making better strategic decisions.
Should I hire an accountant instead of doing it myself?
Hiring a professional can save time and reduce the risk of errors or fines for incorrect tax filing. They can also provide strategic advice on financial planning, help you choose the right legal structure (like sole trader or limited company), and show you how to be more tax efficient.
How do I find the right accountant?
To find the right accountant, look for someone who specialises in your specific industry or business needs. Most importantly, check online reviews or testimonials to make sure they’re trustworthy and a good fit for your business culture. And because lots of accountants work remotely, you’re not bound to those in your local area.
Can an accountant help with legal compliance?
Yes, accountants can help make sure you stay on the right side of the law, from advising on the best business structure to checking that you meet the necessary legal requirements, such as employers’ liability insurance.
More small business finance guides
- Cash basis vs accrual accounting – which should you use?
- How long to keep tax records in the UK – a small business guide
- Self-employed expenses – what expenses are tax deductible?
- Is business insurance a legal requirement?
Looking for self-employed insurance?
With Simply Business you can build a single self employed insurance policy combining the covers that are relevant to you. Whether it’s public liability insurance, professional indemnity or whatever else you need, we’ll run you a quick quote online, and let you decide if we’re a good fit.